- A grow op is 24 times more likely to catch fire
- Poisonous gases are circulated through the neighbourhood, initiating from the grow op home.
- Power outages in the neighbourhood
- Explosions: Occur as a result of the solvents and oxygen used.
- Electrocution and booby trap hazards for emergency responders
- Chemicals are not properly disposed of in most cases and are washed down household drains into the city’s water system
Grow ops contribute to the decline of the market value of neighbouring properties, no matter what the area is.
How to Identify a Grow-Op
- Untidy Property: Uncollected mail, yards not taken care of, and a messy interior may be present.
- Enhanced Security: Often put on properties to detect investigation by police or to detect break-ins by other criminals. This could include, but are not limited to, high fences, flood lights, additional locks on doors, bars on windows, security camera and “Beware of Dog” signs.
- Improvised Vents: Vents installed in unusual spots throughout the home
- Window Coverings: Windows may be covered, blacked out or never opened.
- Water Condensation: Due to high humidity levels, condensation may form on windows.
- Exterior Stains: There may be signs of sweating, staining, or “wet spots” on the exterior and foundation of the home.
- Criminal Activity: Increased criminal activity in and/or around the home. Perhaps an increased police presence or neighborhood nuisances.
- Power Surges: There may be localized power surges and/or brown-outs in the neighborhood when a grow op is present, due to the high levels of power required to maintain these crops.
- Meter Tampering: Hydro or electrical meters are often tampered with or bypassed allowing the criminals to steal the water and electricity that is needed to maintain their crops.
- Odd Smell: A skunk-like odour may occasionally be detected around the home.
- Piled Garbage: Garbage may be stockpiled on property due to irregular disposal. This may contain soil, pots, fertilizer and/or chemical containers, wiring, PVC piping and other construction materials.
- Mould: Build up of toxic mould on the walls, ceilings and in the attic that is a result of high humidity. This is a major factor why these homes are uninhabitable without remediation after the grow op is shut down.
- Humming Sounds: Sounds may be heard from large fans, generators, or modified venting systems.
- Distractor Props: Props may be used to deter suspicion and give the impression that the home is occupied. A TV or radio may be left or, or turn on and off at the same time each day.
- Improvised Electrical Systems: Custom electrical systems may be installed to provide the power needed to maintain the operations – this creates a huge fire hazard in the home.
- Holes in Foundation: Holes may be drilled in the walls or foundation of the home to by-pass electricity and water meters.
- Unusual Activities: Visitors may come and go at odd hours, may be at the home for short periods of time or may rarely be seen. Visitors may also drive expensive or suspicious vehicles.
– An initiative by the Government of Alberta
All information pulled from:
On Saturday August 10th, 2013 – we posted an amazing documentary on our Facebook page, done by 60 Minutes, about China’s “Real Estate Bubble”. If you have not watched it, we encourage you to… and if you have watched it,we encourage you to watch it again! (Find the video here: http://www.youtube.com/watch?v=DhAnUueKt2E ) and this serves to follow up on facts and opinions about this situation. Please keep in mind that this is information found via the internet and does not reflect the views of Robyn Moser & Associates and CIR Realty, but is to ignite conversation and your desire to do your own research on this topic.
According to a survey done by Beijing Police, a “vacancy rate” is defined as “no individuals living in the home for at least half a year (six months)”2 . It is this vacancy rate, and the rate of construction that has created this hypothetical “bubble”, in which the video documentary shed some light on. Wang Shi, owner of Vanke, the largest development company in China, admits that he is the leading real estate developer due to “quantity, not quality”1. Curious as to what factors could contribute to such a massive inflation in such a short period of time, we decided to do some research.
Urbanization, government policies, cultural attitudes, low interest rates, increased bank lending and cheap construction… have all been factors leading to this issue3. China has a population of nearly 1.4 billion people4, with an average annual salary of only $6,0001. It is these facts , measuring the median house prices divided by the median annual incomes, otherwise known as the “house price to income ratio” that prove that this ‘theory’ might hold a lot of validity.
The thought is “if you build it, they will come”1. Urbanization, the migration from rural areas to urban cities, is expected to bring ten million new residents into China’s cities each year for the next decade, thus, creating a need for thirty two million new homes to accommodate these migrants5. This has lead directly to the rise of the proposed “mega city”, resulting in multiple “ghost cities” throughout China, which many Western news coverage’s have compared it to the US housing market crash of 20095. However, it differs from the US crash: ” Well, it’s a U.S.-style bubble in that it’s been created by vast amounts of cheap money. But it looks slightly different. So, the U.S. bubble was really driven by low-end mortgages being issued, whereas this bubble is really high-end speculation. So the debt dynamics are slightly different. So there’s no real mortgage debt backing the Chinese property bubble.” says Gillem Tulloch, a Hong Kong based Financial analyst7. But, where are the people going if they aren’t occupying these new developments!?
This urban sprawl has led to developers and builders to build “Lego set” type homes; pre-fabricated floors and walls that are put into place with cranes1. We assume the structural integrity of these buildings could easily be questioned by how quickly they are assembled, similar to the houses built during the labour shortage of 2006-2007 in Calgary, Alberta. Although, ideally, urbanization means more individuals will move into these buildings, that doesn’t seem to be the case. Towns only an hour away from major Chinese cities are nearly completely vacant; Zhengzhou, one hour away from Shanghai, is said to be the largest “ghost city” and has been described as a “forest of skyscrapers”, and is as quiet as a forest, too1. You would think that due to the amount of “ghost cities” found across the country, that they would stop building, but they aren’t… even though many developments are at a standstill due to lack of funding or debt 1. You’ll be surprised to know that these towns aren’t completely “vacant”, in fact, 64 million apartments are owned, typically, by the upper-middle class, but lack the tenants in them.
To put this into perspective:
– 28.9% of housing units are vacant in Beijing – They have approximately 13.2 million units and 3.8 million are confirmed vacant2.
– Over 90% of public rental housing in Zhengzhou are currently vacant6.
– Beijing’s largest district, Chaoyang, had 1.33 million square metres of vacant residential space, and 54.9% of homes that were vacant for at least 3 years, in 20102.
– The vacancy rate of the United States of America usually sits at around 2.1%.
Banks increased their lending amounts and decreased their interest rate, making it a perfect investment for the Chinese people, allowing the bubble to inflate rapidly. Individuals continue to buy these housing units because property prices have always gone up more than inflation rates – making it a safer investment than investing in the stock market or having the money sit in the bank, and Chinese government makes it illegal to invest over seas1. These upper-middle class individuals, which represent approximately 25% of the population and are classed as ‘professionals’, are using these units as second and third homes and have invested up to three generations of money, which could sewer them if the bubble were to “burst”5. 74% of the population, 17.1 million individuals classified as ‘workers’, have an annual income of less than $10,000 a year, qualifying them for a house less than $80,0005. Vacant units in Zhengzhou retail between $80,000-$100,000USD1, and due to the quality of construction, are not worth the amount paid for them. There are 19% of homes with an asking price at or higher than $600,000 and the number of individuals who can afford these homes is not proportional to the number being built5. So we must ask, how does the vast amount of building make sense!?
In short, China does need the infrastructure, but the type in which they have chosen to build, doesn’t seem to make sense in terms of the supply and demand of the current economic state and is focused on the wrong area . They need affordable housing; emphasis on the word “affordable”. The government and developers are clearing out villagers, farmers and rural families, essentially kicking them out of their affordable living situations and forcing them to relocate. Where is the humanity in this!? And where are they expected to go!? Does the government help them!? All this so a mega-city won’t thrive…!? Hmm…
China believes this oversupply of housing is justified due to the dominant middle class, who are buying the properties, the booming urban population, otherwise known as the urbanization of China, as well as the drive to become the dominant super power. But where the question lays is whether or not this bubble will “pop”, and what the repercussions of that may be to China or global economics. Will there, or are there consequences!? Are they predictable at this time!?
There is a polarized debate; some support a temporary market correction, while others predict a complete market crash5. Two sides of the argument are quoted here:
Temporary Market Correction: “China is not facing a major housing bubble, although there could be a short-term mild correction. The Economist Intelligence Unit’s new models of population and incomes in China’s cities point strong underlying demand for housing throughout the next decade. They indicate that housing is growing so quickly that a correction in the next couple of years will be short-lived.” – The Economist: Building Rome in a Day – November 2011.5
Market Crash: “China is on a ‘bigger and faster treadmill’ than ever as property sales slow, said Jim Chanos, the hedge-fund manager who’s shorting banking stocks on a bet the market will crash. Chanos has forecast since at least February 2010 and the property market will slump, saying that China is Dubai times a thousand and on a ‘treadmill to hell’ because of its reliance on real estate for growth.” – Bloomberg BusinessWeek: Chano Says China Property is Slowing – October 28th, 2011.5
In fact, some individuals speculate, although China has a booming consumer culture (whereas North American has the opposite), they have grossly overestimated it. This is leading to an oversupply of property and living accommodations. Over 70% of the newly built buildings are unoccupied. This doesn’t include only residential real estate though; there are huge markets, shopping malls and a financial district intended to mimic Times Square in New York City, that are completely deserted… and have never once had tenants. However, some argue that although essentially vacant, these cities may thrive in the years to come.
If this hypothetical bubble were to burst, many individuals could be “harmed”. Investors could be wiped out completely and construction workers laid off1, which leads to a social unrest and potential debt crisis. Some social unrest has already occurred against the most predominant residential real estate builder in China, Vanke. Demonstrations in the offices and developing buildings have occurred, and could only get worse.. Most developers have taken out such large loans from banks, that even though they continue building, they are in huge debt, which could lead to huge down turn in the economy, leading to implications on a global scale. Even the biggest builder in China believes that China’s current situation is unrealistic and the prices are far too high for the vast majority of people, and even calls it “dangerous”1 and if it pops it could be a “disaster”1. Those are pretty strong words for someone who leads this industry. So, if this builder admits that what he is supporting is dangerous to the economy and to the good will of the Chinese people, why does he (and others) continue!? Do other developers have the same view as him!?
Now, is there actual proof of this so-called “bubble”!? Yes and no. The significant numbers of vacant and/or underperforming residential and commercial properties with the continued construction of property despite this, is pretty much the “definition” in a nutshell. However, the bubble has been slightly “deflated” since its peak between 2008-2010. In 2011, the Chinese Cabinet introduced new rules and regulations to curb the bubble as it was quite apparent and to keep it from worsening. Finally! These rules included: requiring families buying a second home to have at least a 40% down payment (first time home-buyers in Canada only need 5%), limiting the number of homes a family could own to two (although this only is applied in Beijing), and the government increased down payments and taxes on new property purchases; which could curb this incredible inflation. Both sides have their merits and it depends completely on the facts you choose to believe.
Some argue the bubble is continuing, but some believe it “ended” in 2012, if it ever actually has a definitiveend. The declining economic growth that occurred in China in 2012 could have been in direct correlation to the stricter rules to the real estate market and the money and jobs it has created during its peak. But whether or not there is concrete proof that the downtown of the economy was to blame because of this, is arguable.
Although the prediction of mass consumerism has been drastically inflated, in this case, many still believe that one day these cities will thrive. We wonder how long that will take.
If the Real Estate bubble is still occurring, even slightly, could the debt and social unrest lead to a global crisis? How would North America be affected!? What we can say, is that by watching why China has done this, and the implications and outcomes of this situation – Canada to learn what to do and what not to do. Also, this “issue” is relevant on a global scale because China is a huge world leader in multiple aspects – so, if their market were to “crash” how would that affect their partners.
Is there anything we can do, from a distance, to help slowly dissolve this “bubble”!? If so, what? If it truly is a “crisis” or could potentially turn to one, why aren’t any other countries assisting!? Lastly, how can we guarantee that something like this doesn’t happen in our homeland!?
1. “China’s Real Estate Bubble”. YouTube. http://www.youtube.com/watch?v=DhAnUueKt2E . Retreived August 5th, 2013.
2.”Beijing Housing Vacancy Rate at 28.9%: Survey”. Caijing.com.cn. http://english.caijing.com.cn/2013-06-17/112916254.html . Retrieved August 14th, 2013.
3. “Chinese property bubble (2005-11)”. Wikipedia. http://en.wikipedia.org/wiki/Chinese_property_bubble_(2005%E2%80%9311). Retrieved August 9th, 2013.
4. “Current world population (ranked)”. Geohive. http://www.geohive.com/earth/population_now.aspx. Retreived August 14th, 2013.
5. “China Property Market Summary; November 2011”. COFI. http://www.cofi.org/wp-content/uploads/2012/01/china_property_market_review.pdf. Retrieved August 14th, 2013.
6. “Real Estate. Over 90% Public Rental Housing in Zhengshou Left Vacant”. China Scope Financial. http://www.chinascopefinancial.com/en/news/post/9449.html. Retrieved August 14th, 2013.
7. “China’s property bubble is going to burst and investors should not be putting money in the sector, says Gillem Tulloch of Forensic Asia”. 4 Traders.http://www.4-traders.com/news/China-s-property-bubble-is-going-to-burst-and-investors-should-not-be-putting-money-in-the-sector-s–16517520/. Retrieved August 14th, 2013.
4154 homes for sale in metro Calgary
2205 homes sold in the last 30 days
1.88 months worth of inventory
53% of the homes statistically to sell in the next 30 days
Market Conditions: Aggressive Sellers
Average List Price : $466,146
Average Sale Price : $456,146
Average days on market : 40
Average list to sale price ratio : 98%
We are now seeing an aggressive sellers market. This still requires sellers to list at market values but allows them to generally (not always), have the terms of the negotiations and possession work in their favour. As for buyers, this will require a bit more compromising on your side for either your wants and needs or, your length of time you are willing to place to find “the perfect home”.
4661 homes for sale in metro Edmonton
1238 homes sold in the last 30 days
3.76 months worth of inventory
Market conditions : Balanced
27% of the homes statistically to sell in the next 30 days
Average List Price : $367,970
Average Sale Price : $357,750
Average days on market : 47
Average list to sale price ratio : 97%
Firstly, if you haven’t “liked” the Robyn Moser & Associates Facebook page… you probably should! There you will find useful household tips, fun facts, contests, prizes, Real Estate information, market information.. you name it. Click here! https://www.facebook.com/RobynMoserAssociates
Secondly, if you DO “like” that page you would have noticed a funny building posted that looks like a basket! Ironically, the building is called “The Basket Building” (Original, huh?) and because all of you liked it so much, we thought we would provide you with some background on that building! Here we go!
The Basket Building was built in 1997 after being only a dream for years and years of Dave Longaberger, the founder of The Longaberger company (Original, huh?), which manufactures hand crafted maple wood baskets and other home and lifestyle products. Found at 130 West Main Street in Newark, New Jersey, this building is built of stucco over a steel structure and serves as the corporate headquarters of the company. Now, we think the exterior is a marvel in itself, but we’re told that the inside is even better. Inside showcases a grand staircase, marble floors, a piano player and a roof full of windows so you can see the handles of that basket that stretch over the seven story building!